Milk: "Got Milk?®"
Article

The following is the text of an article which used to be at the URL
<http://www.gsm.ucdavis.edu/Innovator/Spring99/milk.htm>,
from the UC Davis Innovator, Spring '99 issue. The parts about
the level of funding are highlighted thusly.

On January 26, 1999, the winter Business Partners breakfast featured Jeff
Manning, executive director of the California Milk Processor Board.
Although his name may not be familiar to many people, the advertising
campaign that he spearheaded - GOT MILK?® - probably is. Manning has spent
25 years in the advertising agency business and has extensive experience
selling both consumer products and services. His clients in the past have
included companies such as Safeway, Bank of America, Procter & Gamble and
Hunt Wesson. In 1993, Manning suddenly found himself in the role of client
when he accepted a job at the California Milk Processor Board. With the
overall volume of milk sold in the state declining on an average of two to
three percent per year in the late '80s and early '90s, Manning was hired
to develop a marketing program. His charge was simple: turn it around in
three years. Since then, Manning has developed GOT MILK?® into a highly
competitive brand that competes effectively with the biggest players in the
beverage business. Below are excerpts from his presentation.

Most marketers create fairly complex matrices that identify the competition
and break them down into quadrants with lots of dots and stuff like that.
It struck me when I got into this business that that wasn't going to be a
productive way of looking at our competition. At the time, I read a quote
from Doug Iverster, who was Coca-Cola's president and has since become
chairman, that said "I'd like to earn your friendship, but that's not
really my priority. Nor is earning the beverage industry's respect and
admiration. All of those things would be nice, but this is what I really
want - I want your customer." In 1993, I showed this to the California Milk
Processor Board and said, "this is the competition. Don't worry about where
we stand on some matrix. Coca-Cola wants 100 percent of the non-alcoholic
beverage business. This is who we're competing against. This is also true
of Pepsi, Snapple, Evian, Gatorade, etcetera. These people all want
everyone else's business and just because we're selling milk doesn't mean
they won't take away our customers." It was a bit of a wake-up call for the
dairy industry because prior to that it had been an "oh-so nice and we're
good for you, too" kind of business. It was time to stop being so nice.

Up until then, the dairy industry had a very long objective statement.
This is our objective statement today: Sell More Milk. Everything that we
do, every moment that I spend, gets filtered through this objective. If it
doesn't sell more milk or have the potential to sell more milk, we won't do
it - it's that simple. So if a board member suggests that we go off and do
something extra, I ask if his idea will sell more milk. If the answer is
"no" or "I'm not sure," then we probably shouldn't do it. Everything we do
gets pushed through this sieve of "sell more milk."

Spending

We assess money from each processor in California -
it's the law. We assess about three cents per gallon, which generates about
$22 million per year for the State of California to market milk
generically. We also have some revenues from licensing. In total, we have
about $27 million to spend. Up until I came on board, the dairy
industry had been spending small amounts - a million dollars here and a
million dollars there. The California Milk Processor Board decided that if
we couldn't spend the kind of money it takes to make us competitive with
products like Coke or Gatorade, at least in California, that we'd dissolve
the advertising program.

Our media plan is simple - to reach people in their home when they're in
front of the television set, 30 feet from the fridge. People typically
don't drink milk at business meetings or at baseball games or at McDonalds.
Less than five percent of all milk is consumed out of the home. There's a
500-page document that supports this, but the point is that the focus of
our advertising is to encourage people who are at home to reach for cookies
and milk instead of chips and soda.

Deprivation

Deprivation is a word that isn't used very often in our language, and
especially not in advertising because it suggests that people can't get
what you have to offer. But, in our case, this is the most important part
of the GOT MILK?® campaign.

Through the use of focus groups, we observed that most people consume milk
with food. Five years ago, the only advertising for milk showed a cold
glass of milk sitting on a kitchen counter by itself - there was never any
food shown with it. It was advertised as a stand-alone beverage. That works
just fine for Snapple or Evian, but that's not how the public drinks milk.
People drink milk with muffins or cereal or cookies or brownies. It's not
consumed as a beverage very often. I presented my idea of selling milk with
food to our advertising agency, and they countered by saying that I was
only half right. If you give people milk with certain types of food,
together they're really delicious. The key was to give people the food and
then take away the milk. The humor and the power of GOT MILK?® is that it's
true. It's a pain to pour the bowl of cereal and then reach into the fridge
to find that there's only an ounce and a half of milk left in the
container. We gave people the food, took the milk away, and they started to
think milk was crucially important.

You have to look at your business and discover what is different or unique,
and play to that quality. We didn't try to change the milk business - we
looked at the truths that were already there and found a different way to
present our product. Every business person should try turning their
business a little on an angle in order to change their perception. It may
lead to some interesting and successful new marketing strategies.

Executing the Strategy

We came up with a very good strategy, but somebody has to execute that
strategy. Whether it's in a client service business or a record business,
you have to take that strategy and it has to be executed in a way so that
your customers feel the power of that strategy. Truthfully, we could have
screwed it up if we hadn't done it well. We had to express something we
knew to be true in ways the public hadn't thought of. There is so much
marketing these days that's telling people something that they know isn't
true. It doesn't work. You have to look for the truths and build your
fundamental strategies around them. We took one truth and blew it grossly
out of proportion.

We also got people to laugh about milk. The milk industry as a whole had
spent so many years lecturing people about how milk is good for you - it's
got vitamins, it helps you grow - by the time a kid turns 12, they're tired
of the lecture. They get enough of that from their parents. The last thing
I wanted to do as an advertiser was lecture consumers. Got milk?® It wasn't
even a statement, it was a question that had a lot of power. Our
advertising agency came up with some very intelligent ads that took the
deprivation strategy to its farthest limits. We trusted them to take some
intelligent risks and those risks paid off. In fact, one of our television
ads was just recently named one of the best campaigns in the last 20 years
by Ad Week. Who else was in the running? Coke, Pepsi, the Ever Ready
battery, Absolut Vodka. We're starting to become competitive, which is, of
course, one of the very reasons we did this.

Co-Branding

This was also about the time that we ventured into the world of
co-branding. We wanted to show Oreo cookies, which are readily recognizable
to almost everyone. Up until then, we used generic chocolate chip cookies,
generic cupcakes. But for this new ad, we wanted to use the Nabisco Oreo
brand. So we asked Nabisco if we could license their Oreo trademark.
Because GOT MILK?¨ hadn't gone national yet, we had to do a lot of
persuading. We finally convinced them that we'd pay for a million dollars
of outdoor advertising and they'd get free publicity. They didn't pay us,
and we didn't pay them. They got the benefit of free advertising and we got
the benefit of using their trademark. Oreos typically showed milk in their
commercials anyway, so it made sense to do a partnership. That led us to do
other co-branding ads with products such as General Mills Cereals,
Pillsbury Cookie Dough, DOLE bananas, Nestle Quick and Quaker Oats.
Eventually, things started to go the other way - people approached us about
co-branding.

In 1996, I got a call from the Barbie brand manager at Mattel. I figured
she had the wrong number. Mattel sells one Barbie every four seconds around
the world. What could they want from us? The brand manager tells me that
they were developing a cookies and milk Barbie and wanted to know if it
would be okay to call her "Got Milk?® Barbie." At that point, my Board was
wondering if we should start charging a usage fee. I'm quite convinced
today that if I had asked for, oh, say a penny per box, she would have been
named the Cookies and Milk Barbie. I reminded the Board that we get as good
as we give in these reciprocal relationships. Mattel didn't need to use the
Got Milk?® trademark and probably would have walked away if I had asked for
a percentage of the income. Instead we received free advertising.

GotMilk.com

For the last three or four years people have been telling me that we should
have a GOT MILK?® Web site. I would respond, "does it accomplish our
mission to sell more milk? No. Sure, we can entertain people, but that
doesn't serve our mission. But, we were already licensing GOT MILK?® as a
trademark on products. We waited until enough products were being produced
that it made economic sense to create an e-commerce Web site. I couldn't
sell milk on the Web, but I could sell GOT MILK?® stuff. Many people rush
into this Web site thing, paying designer fees and programmer fees, but
there has to be a solid business reason for doing it. Somewhere along the
line, you have to make money from your Web site - there has to be a payoff.

On the Got Milk.com Web site, we sell a variety of GOT MILK?®
products. There are watches, toys, dolls, apparel, cookies, books, kids
accessories, baby shower gifts and possibly QVC in the future. Licensing is great because it generates additional revenue that
we didn't anticipate when we launched this campaign. The products alone
probably generate about $1 million per year in revenue. That may not sound
like much, but for a state commodity board, that's an enormous amount of
unanticipated income.

Results

The GOT MILK?® advertising campaign was launched in 1994 and by 1996
we had achieved a 91 percent awareness rating. Since then, we've leveled
off at about 90 percent. We spent a lot of money. We did a lot of work. The
Board expected this kind of success rate and they were right to expect it.
Reaching a 91 percent awareness rate was not really the big accomplishment.
When the Board hired me, milk consumption was declining by about two to
three percent per year due to the proliferation of beverage products on the
market and a tremendous surge of out-of-home eating. The GOT MILK?®
advertising campaigned kicked into gear in 1994 and, as expected, the rate
of consumption leveled off. If it had continued to decrease at two to three
percent per year, demand would have gone down cumulatively by hundreds of
millions of gallons. So, we didn't drive sales up. What we did was stop the
hemorrhaging in the face of competition from Coke, Pepsi, Snapple,
Gatorade, Evian - a whole slew of competitors with deeper pockets.

The magic of GOT MILK?® is that it has become part of the vernacular of
this country. It has evolved far beyond an advertising campaign. We now
treat GOT MILK?® as a brand, just like Wells Fargo, Nike or Coca-Cola. How
we express GOT MILK?® will change over time, but we're no longer seeing it
as a jingle or a campaign. We're seeing it as the dairy industry's brand.
People don't buy name brand milk. If you ask the average person what brand
of milk he buys, he'll say "two percent". So to that extent, GOT MILK?® has
become the brand name for milk in the United States.